Castle Resources Inc.

May 15, 2008 17:52 ET

Castle Resources to Acquire Majority Control of the Historic Silver Camp in Cobalt, Ontario

- Historical production of more than 445 million ounces of silver, 45 million pounds of cobalt - District-scale exploration opportunity on previously unconsolidated 3,083 ha land package - Near-term potential for mine rehabilitation, tailings production and additional acquisitions

TORONTO, ONTARIO--(Marketwire - May 15, 2008) -


Castle Resources Inc. ("Castle ") (TSX VENTURE:CRI) announced today that it has entered into a share purchase agreement with Legends of Cobalt Corporation ("LO C") and the shareholders of LOC to acquire all of the issued and outstanding common shares of LOC in consideration for the issuance of 20,037,000 common shares of Castle, effective April 25, 2008 (the "Transaction"). Following the completion of the Transaction, LOC will be a wholly owned subsidiary of Castle. The closing of the Transaction is subject to regulatory approval from the TSX Venture Exchange.

The primary asset of LOC is an option to acquire any or all of a claim package that covers the majority of the Historic Cobalt Mining Camp of northeastern Ontario, one of the most prolific silver mining camps in modern history. The Cobalt Mining Camp began operations in 1903, producing more than 445 million ounces of silver, along with more than 45 million pounds of cobalt and significant base metal by-products, from more than 100 underground mines through the 1980's. The claim package under option to LOC includes more than 50 of those past-producing mines, including four mines that produced in excess of 40 million ounces of silver. Ore from the district averaged head grades of 20 to 25 ounces per ton (oz/t) silver and was often recovered as remarkably large specimens of "native silver".

In its last decades of operation, district production was led by Silverfields Operating Corporation (a subsidiary of Teck Corporation), Agnico-Eagle, and Canadaka Mines Ltd. The 3,083-hectare claim package under option to LOC was assembled by Agnico-Eagle in the 1980's and was later sold to Blackstone Development, Inc. ("Blackstone "), a private Ontario company. The Cobalt area has significant infrastructure, including roads, rail, water, and power. It is politically friendly to mining and home to a skilled workforce Castle anticipates that at least some of the underground workings are likely to be useful, at least for exploration purposes.

Castle management believes that the district has considerable economic potential for its silver, cobalt, and base metal by-products. Prior to the consolidation of the area, modern and district-scale exploration techniques were never used within the camp, due to the fractured nature of its historic ownership. Most of the area mines were relatively shallow (less than 600 feet below surface) and remain untested at depth.

The claim package under option to LOC includes several advanced projects that were under development by Agnico-Eagle prior to its 1990 decision to conclude its operations at Cobalt. These include the Peterson Lake Mine, where a ramp was under development to access a 1.84million ounce (92,275 tons grading about 20 oz/t) historic silver resource. A second advanced target is the Penna Mine, where a 1,200-foot shaft was completed in 1988, which is adjacent to the Langis Mine, a former 10 million ounce silver producer. Exploration records indicate that the Penne-Langis vein system is thought to be 3,000 feet in strike length with a vertical extent of 850 feet, featuring bonanza grades and widths. Historic drill results of this system include silver intercepts of 31.0 feet of 39.0 oz/t, 11.0 feet of 61.0 oz/t, and 5.1 feet of 51.8 oz/t.

Stated Mr. Stephen Shefsky, Castle Resources President & CEO, "The acquisition of LOC is an historic step for Castle as it provides the Company with ownership of a major past producing camp, that still has lots of potential for exploration and development." He continued, "Castle will have a dominant land position in the Cobalt camp which has more than 50 past producing silver/cobalt mines. In addition there are thought to be between 8-10 million tons of silver/cobalt tailings that can be brought to market on an accelerated basis."

About Castle

Upon completion of the Transaction, Castle will have rights to a majority land position within the Cobalt, Ontario Silver Camp.

- Historic Cobalt Mining Camp produced more than 445 million oz silver, 45 million lbs cobalt

- District-scale exploration opportunity on previously unconsolidated 3,083 ha land package

- Near-term potential for mine rehabilitation, tailings production and additional acquisitions

In addition, Castle is focusing on high-quality advanced exploration projects in Mexico. The Company's initial focus is on the San Ramon silver exploration property in Zacatecas, Mexico, a prolific silver producing region in Mexico. Management's goal is to quickly advance its current project and to seek additional opportunities to continue to add value for shareholders.

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Factors that might cause a difference include, but are not limited to: changes in the worldwide price of mineral commodities, general market conditions, risks inherent in mineral exploration, risks associated with development, construction and mining operations, the uncertainty of future profitability and the uncertainty of access to additional capital. The Company will not update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect the financial results is included in documents filed from time to time with Canadian securities regulatory authorities by the Company.

The TSX Venture Exchange has neither approved or disapproved of the contents of this press release.

Contact Information

  • Castle Resources Inc.
    Stephen Shefsky
    President and CEO
    (416) 366-4200
    (416) 366-4201 (FAX)